What are Procurement Opportunity Programs?

The Procurement Opportunity Programs (POP) provide opportunities to increase the number of direct HUD contracting and subcontracting opportunities to small businesses. The POP also provides a means for establishing and monitoring HUD’s annual goals for the participation of small businesses in the Department’s procurement program and serve as a basis for HUD’s performance reports to the SBA. HUD’s OSDBU is responsible for the development and administration of the POP.

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Small Business Set-Aside Program

The Small Business Act requires the federal government to reserve a fair proportion of its total purchases and contracts for small business concerns. The government does this by reserving or “setting-aside” entire procurements or parts of procurements for small businesses.

The government is also required to buy goods and services at competitive, fair market prices. Therefore, contracts are set aside only when at least two qualified small businesses are expected to submit offers that are competitive in terms of market prices, quality and delivery.

Additional information on the program, including small business size standards, is available at SBA Set-aside procurement.

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Small Business Subcontracting Program

Section 211 of Public Law 95-507 requires that the successful offeror or bidder on contracts valued at $700,000 ($1.5 million for construction) must submit an acceptable subcontracting plan that sets percentage (based on the contract’s total value) and dollar goals for the award of subcontracts to small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone, small disadvantaged business and women-owned small business concerns. Small business concerns receiving prime contracts are exempt from this requirement.

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Small Disadvantaged Business Participation Program

HUD encourages the award of prime contracts valued at $100,000 or more to SDBs (other than certified 8(a) firms) that are at least 51 percent owned and controlled by socially and economically disadvantaged individuals.

Socially disadvantaged individuals are those who have been subject to racial or ethnic prejudice or cultural bias within American society because of their identification as members of certain groups. African Americans, Hispanic Americans, Asian Pacific Americans, Subconti­nent Asian Americans and Native Americans are presumed to qualify. Other individuals can qualify but they must show proof of their socially disadvantaged status.

Economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportuni­ties as compared to others in the same or similar line of business who are not socially disadvantaged. Economically disadvantaged status must be established for all applicants.

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8(a) Program

Section 8(a) of the Small Business Act authorizes the SBA to enter into contracts with other federal government agencies to furnish goods and services, and to contract the performance of these contracts to small businesses enrolled in the SBA’s 8(a) Business Development program. The goal of the program is to help eligible small disadvantaged businesses become independently competitive in the federal procurement market.

A firm must be 51% owned and controlled by a socially and economically disadvantaged individual or individuals to be eligible for the 8(a) program; 8(a) firms automatically qualify for SDB certification. Unlike the SDB program, 8(a) applicants must generally be in business for at least two years before applying. The SBA must certify small businesses that want to claim 8(a) status.

The selection of an 8(a) subcontractor may be made on a sole source or competitive basis. Contracts valued up to $4 million ($6.5 million for construction contracts) are normally awarded on a sole source basis. Contracts in excess of $4 million must be competed among 8(a) firms. HUD has executed a memorandum of understanding with the SBA, which allows it to directly award 8(a) contracts to 8(a) firms. This helps to speed up the award of these contracts.

Firms participating in the 8(a) program may take advantage of special­ized business training, counseling, marketing assistance and high-level executive development provided by the SBA and its resource partners. They may also be eligible for SBA-guaranteed loans and bonding assis­tance. In addition, 8(a) program participants are eligible to participate in the SBA’s Mentor-Protégé Program.

Visit SBA for more information about the 8(a) program.

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Historically Underutilized Business Zone (HUBZone) Program

The HUBZone Program, created by the HUBZone Act of 1997, provides federal contracting opportunities for small business concerns located in economically distressed communities. The goal of the program is to increase employment opportunities, stimulate capital investments in those areas and empower the communities through economic leveraging. HUBZone areas are determined by various census data. To qualify as a HUBZone, a business must meet the following criteria:

• It must be a small business by SBA size standards;
• Its principal office must be located within a HUBZone, which includes land on federally recognized Indian reservations;
• It must be owned and controlled by one or more U.S. citizens. Approved ownership can also be by a Community Development Corporation or Indian tribe; and
• At least 35% of its employees must reside in a HUBZone.

The SBA must certify small businesses that want to claim HUBZone status. HUBZone businesses are eligible to receive sole-source or set-aside contracts, or receive a price preference up to 10% when competing for full and open competition procurements.

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Women-Owned Small Business Program (WOSB)

Effective February 4, 2011, 13 C.F.R. part 127 was developed to expand federal contracting opportunities to Women-Owned Small Businesses (WOSB).

A WOSB is a small business concern that is at least 51 percent directly and unconditionally owned by one or more women who are citizens (born or naturalized) of the United States.

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Veteran-Owned Small Business Program (VOSB) / Service-Disabled Veteran-Owned Small Business (SDVOSB) Program

Public Law 106.50, the Veterans Entrepreneurship and Small Business Development Act of 1999, amended the Small Business Act. It added small businesses owned and controlled by service-disabled veterans to the categories of small businesses for which federal agencies develop prime contracting and subcontracting goals. Federal agencies also establish goals and collect data regarding subcontracts awarded to VOSBs by prime contractors.

A “veteran” is defined as a person who served in the active military, naval or air service for at least 4 months and who was discharged under condi­tions other than dishonorable. A VOSB concern is a business that is at least 51% owned and controlled by one or more veterans. VOSBs are not eligible for sole source contracts and procurement set-asides; however, the Federal Acquisition Regulation requires federal agencies to actively encourage their prime contractors to use VOSBs as subcontractors.

The Veterans Benefit Act of 003 amended the Small Business Act by establishing sole source awards and restricted competitions for service-disabled veteran-owned small businesses. For more information on the program, visit the SBA Vets or the Department of Veteran Affairs websites.

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